Investors extended a stock rally Monday following more upbeat earnings and reports that commercial lender CIT Group reached a deal with bondholders to avoid bankruptcy.
A bigger-than-expected rise in a measure of future economic activity also supported stocks. The Conference Board's index of leading economic indicators rose 0.7 percent in June, more than the 0.4 percent forecast. It was the third straight month of increases.
Market indicators jumped about 7 percent last week. The huge advance came after a monthlong slide in stocks that was driven by reports showing the economy was not healing as quickly as hoped. But solid earnings and outlooks from companies like Goldman Sachs Group Inc., Intel Corp. and International Business Machines Corp. gave investors hope that the recession is coming to an end.
Investors are also focused on the earnings reports coming this week. On Monday, companies such as Boston Scientific Corp. and Texas Instruments Inc. are set to issue results.
With the bulk of earnings reports still to come, the market has yet to hear from some key industries including retailing. If those results are disappointing, it could force investors to rethink their most recent rally. And the market still has a number of issues to deal with, including record-high unemployment and a damaged housing market.
"I would look for a little follow-through early this week that will hinge on quarterlies, but longer-term I think we'll see some pressure come back into this market," said Darin Newsom, senior analyst at DTN. "We're still going to have to see better employment and housing numbers."
"I would look for a little follow-through early this week that will hinge on quarterlies, but longer-term I think we'll see some pressure come back into this market," said Darin Newsom, senior analyst at DTN. "We're still going to have to see better employment and housing numbers."
The Dow Jones Industrial Average rose 104.21 points, or 1.2%, to 8848.15, while the S&P 500 climbed 10.75 points, or 1.1%, to 951.13. The Nasdaq Composite edged up 22.68 points, or 1.2%, to 1909.29.
Meanwhile, Goldman Sachs raised its annual forecast for the S&P 500, upping its year-end target to 1060 from 940, predicting strength in earnings will drive stocks higher in the second half of the year.
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